Ploy to Rename PA Severance Tax as “Gross Receipts” Tax
Democrats just love to help themselves to OPM–other people’s money. They have a spending habit the equivalent of a crack junkie. Ever notice how junkies use very creative ways to try and feed the habit? One of their favorite tactics is to euphemize–call the same thing by a different name. In Pennsylvania, big-spending Dems in the legislature, along with their big-spending governor, Tom Wolf, are at it again. A severance tax is a tax on natural gas as it comes out of the ground–“at the wellhead.” You measure what comes out and you tax it. Another way to tax the same thing is called a “gross receipts tax”–which taxes the value the gas was sold for. In essence, a gross receipts tax is a sales tax. The price of the underlying good being sold goes up–so does the tax (it’s a percentage of the sales price). At the end of the day, a tax is a tax is a tax. You can call it a severance tax, or you can call it a gross receipts tax–it’s the same thing: a tax. Because Dems have short-term memory issues, we’ll remind the Dems reading this that Marcellus gas is ALREADY TAXED–by two different taxes: an impact fee and corporate income tax (on profits). PA is already paying the equivalent of a very healthy severance (or gross receipts) tax. But all the Dems can see are big dollar signs–that a gross receipts tax could raise $500 million per year or more–to feed their enormous big spending habit…
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Maryland is actively looking at revising draft regulations that would allow fracking with an eye to adopting the new rules later this year, and letting fracking begin in the state in October 2017. The antis are, of course, apoplectic that fracking might happen in the liberal paradise of Maryland. However, the oil and gas industry is not all that thrilled with the proposed changes coming from the Maryland Department of Environment (MDE) either. We’ve been critical of new Gov. Larry Hogan and his lack of spine on the fracking issue (see 
This week the Developing Unconventional Gas (DUG) East event was held in Pittsburgh, PA. There was a fair bit of news and a host of interesting stories coming from the event. Below we’ve listed stories worth your time, with a very brief summary of why to read those stories. To tease you: the money people think land deals are about to pick up in the Marcellus/Utica; Dept. of Energy Deputy Director Carmine Difiglio signs the praises of the Marcellus/Utica; in the weeds talking about technology; CONSOL’s plans for the Ohio Utica; and much more!…
In May MDN told you that the Penn Township (in Westmoreland County, PA) zoning board voted to refuse to grant a permit to Apex Energy to build a DEP-permitted well pad in the town (see 
If this doesn’t take the cake: The very corrupt New York Gov. Andrew Cuomo sold out his own residents and their property rights to radical leftists by placing an ongoing moratorium on high volume (not low volume) hydraulic fracturing, and then by denying the Constitution Pipeline necessary permits to begin construction. He also signed on to nutjob Al Gore’s so-called climate initiative (an elaborate hoax to profit Big Green causes). Cuomo has done everything he can to stop natural gas production in the Empire State. And then he turns around, and as part of his official energy policy says (via his underlings at the Public Service Commission) says that natural gas is clean-burning and important part of the state’s energy future. Talk about chutzpah!…
The “best of the rest” – stories that caught MDN’s eye that you may be interested in reading. In today’s lineup: Ohio has drilled 1,751 Utica wells so far; StateImpact shills for fractivist lobby groups; Wolf signs bill killing new conventional drilling regs; Degner gets promoted at Range Resources; U.S. House investigating state AGs over Exxon probe; associated gas production falling; completions outpace new drilling; API likes Trump energy plan; and more!
Rex Energy Corporation, one of our favorite smaller Marcellus/Utica drillers, issued an update on their Marcellus drilling program on Tuesday. You may recall that just last week Rex announced they were selling off the rest of their non-Marcellus acreage to become a pure play driller (see 
On Monday MDN brought you the latest quarterly production numbers for the Ohio Utica Shale, direct from the Ohio Dept. of Natural Resources (see 
The coming Shell ethane cracker plant complex in Monaca (Beaver County), PA, will create a lot of jobs–some in the near-term, but many in the medium-to-longer term. The plant won’t be complete for another five years. Between now and then it will take 6,000 temporary workers to build it. Once built, the plant will take 600 permanent employees to run it. Is Beaver County and the greater Pittsburgh region ready for that kind of jobs challenge? As of today, the answer would be “no.” But leaders in the area are working on it…
Ultra Petroleum, based in Houston, TX, is an independent exploration and production (E&P) company mainly focused on drilling in the Green River Basin of Wyoming. Ultra also drills for oil in the Uinta Basin/Three Rivers area in Utah. In addition, Ultra maintains a position in the Pennsylvania Marcellus shale with leases on 184,000 gross (91,000 net) acres–no small amount. They aren’t currently drilling on their Marcellus acreage, but if prices change, they likely would. That is, if they make it through bankruptcy. At the end of April Ultra filed for Chapter 11 bankruptcy (see 
Last year Pennsylvania Gov. Tom Wolf thought he could win in a game of “chicken” with Republican majorities in both the PA House and Senate. Wolf tried to ram down their throats a number of tax increases–including a raise in the personal income tax, sales tax, cigarette tax, severance tax–just about any tax you can think of. Wolf lost. The budget was a disaster because he wouldn’t negotiate, wouldn’t compromise, wouldn’t do anything. He was banking on a liberal media to come to his support. In the end, even the media abandoned him as a hardheaded putz. This year Wolf is singing a different tune. He’s not demanding higher taxes and enormously bloated spending increases across the board. However, Wolf is still obstinately insisting on a Marcellus Shale severance tax–even though the industry is on the ropes and in survival mode. Just when we thought he was wising up…
The legal beagles of top energy law firm Babst Calland recently released their sixth annual energy industry report called, “The 2016 Babst Calland Report – An Unprecedented Time for the Oil & Gas Industry: Price Down, Supply Up, Reform Ahead; Legal and Regulatory Perspective for Producers and Midstream Operators.” This annual review of energy and natural resources development activity acknowledges the continuing evolution of this industry in the face of economic, regulatory, legal and local government challenges. In an MDN exclusive, we have the first six pages of the 68-page report (see below), along with details on how you can request a full copy. Worth the read!…
Pennsylvania state officials estimate there are as many as 200,000 abandoned oil and gas wells in the state–the vast majority of them conventional wells drilled over 50 years ago. Most of them are not mapped or known. Some of them are hazards for shale drillers who stumble across them when drilling new wells. If you drill horizontally and clip an old/abandoned well, it becomes like an elevator pumping fluids and gas to the surface. Not good. Everyone is committed to finding and marking and capping these old wells. In March, MDN highlighted the issue (see